$30,000 in damages and $151,045 in costs. $20,414.813 in damages and $237,017.50 in costs.

Litigation is expensive. We all know this to be a fact, but a couple of recent Ontario Superior Court decisions drive home the point. While at first blush one might think that awarding costs worth five and ten times the damages is outrageous, in both cases, the costs awards were fair and reasonable in the circumstances of each case. Had the trial judge awarded anything less, injustice would surely be the result.

The trial judges in both cases referred extensively to my case of Cobb v. Martin Estate, 2017 ONCA 717 — a case that I will never forget. I learned a lot in the 19 day jury trial and subsequent appeal. Many of the issues that were argued in the appeal are up for another hearing at the Court of Appeal, this time before a five-member panel in May 2018. In any event, I digress. Back to the two recent costs decisions.

The first, Duncan v. Taylor, 2017 ONSC 7445, involved an assessment of costs after the plaintiff accepted a defence offer to settle. What makes this case particularly interesting is that the plaintiff was very seriously injured, but was more at fault. He had turned left in front of an oncoming vehicle. The plaintiff was charged and convicted under the Highway Traffic Act with making an unsafe left hand turn. However, there was evidence that the defendant was speeding and if he had not been speeding could have avoided the collision.

In the end, the plaintiff accepted the defence offer to settle of $30,000 for damages plus costs to be assessed by the trial judge. The plaintiff argued for legal fees of $81,278 and reimbursement for disbursements (cases expenses) of $121,045 for a total costs award of $202,232. The defendant argued for a total costs award inclusive of disbursements of $55,000. The judge assessing the costs felt that the legal fees needed to be proportionate to the amount the plaintiff recovered. In this case, considering that the plaintiff recovered $30,000, the trial judge decided that fees of $72,278 were outside what would be proportionate and awarded legal fees of $30,000. However, the judge did not find that the disbursements of $121,045 were at all unreasonable.

The judge recognized that the plaintiff had the onus of proving liability and this was a difficult case. Over $78,247 of the $121,045 in disbursements was for expert reports. These were all necessary for the plaintiff to prove his case. The judge found no reason to reduce the amount of disbursements and rightfully awarded the plaintiff $121,045 to reimburse plaintiff’s counsel for these costs.

The second case, Persampieri v. Hobbs, 2018 ONSC 368, involved a hotly contested trial. About five years ago, many automobile insurers, lead by Aviva, made a business decision to fight every case that it deemed “defensible”. This is scorched earth litigation at its worst. This case is an excellent example of the high cost of this tactic.

The plaintiff was 84 years old. On February 11, 2009, she was a passenger in a vehicle that was hit from behind by the defendant. The defendant admitted liability. But his insurance company, Aviva, took the position that the 84-year-old plaintiff ought to receiving nothing for her injuries. So, Aviva offered $0 to settle the case. The plaintiff tried to be reasonable, recognized the risks and offered to settle before trial for $10,000 plus costs. Aviva said no. The result a 2 ½ week jury trial. In the end, the jury awarded the injured plaintiff:

- $40,000 for pain and suffering damages

- $25,000 for loss of ability to perform housekeeping and home maintenance

- $2,000 for attendant care; and

- $500 for medical and rehabilitation expenses

After applying the statutory deductible to pain and suffering damages and collateral benefits, the net judgment was $20,414.813 in damages. Recall that the plaintiff offered to settle for $10,000 in damages. The insurer ought to have settled this case. Instead of paying a reasonable settlement to an injured 84-year-old woman, Aviva forced a trial. As noted by Justice Sanderson, Aviva cannot claim proportionality to reduce costs where it was the reason for the costs of this trial, writing:

[99] Because it had framed its defence in the manner that it had, it knew that the resolution of the issues at a trial would involve the hearing of lengthy and costly evidence, including extensive medical evidence.

[100] Sanctioning insurers’ litigation strategies involving:

(1) discouraging Plaintiffs from pursuing legitimate but modest claims by refusing to make any meaningful offer to pay damages and forcing those Plaintiffs to trial in circumstances where, because of defences the insurers have asserted, they cannot possibly be successful unless they call expensive medical and other evidence;

(2) then, raising the spectre of very serious adverse cost consequences of such trials;

(3) then, even after Plaintiffs have chosen to take the serious adverse costs risks of such trials, and even after they have been successful at trial and have received costs awards under Rule 49.01(1) on a substantial indemnity scale;

(4) attempting to unduly minimize the quantum of otherwise usual amounts of costs including substantial indemnity costs on the basis of proportionality, would be, in my view, to sanction under compensation of Plaintiffs for costs legitimately incurred to make many lawsuits uneconomic and could generally discourage Plaintiffs with modest claims, even if valid from pursuing them.

[101] If pursuing such an approach or strategy were to have the effect of generally discouraging Plaintiffs from bringing and pursuing modest sized claims, [even in cases such as here where liability has been admitted] the benefits to insurers could be significant and wide-ranging.

[102] If insurers were incentivized to pursue such a strategy and to generally resist settlement of such cases, in order to generally discourage such Plaintiffs from pursuing such actions, that could seriously jeopardize overall access to justice.

[103] Insurers can, of course, pursue whatever strategy options they deem fit, but especially where such strategies may have wide-ranging and adverse implications involving widespread denial of access to justice, the use such strategies should not be encouraged by the giving of cost breaks on foreseeable costs consequences.

I applaud Justice Sanderson for his principled reasons and judgment. As the saying goes, “…live by the sword and die by the sword”. There is no question that Aviva is entitled to take cases to trial, but if it gambles on a trial and loses, it must pay the costs.

The odds are stacked against injured plaintiffs in Ontario. We need to keep fighting for those innocently injured, to ensure that they receive fair and just compensation. Awarding fair and reasonable costs is necessary to make this happen.

+ Read Bio

Kris focuses on helping people who have suffered serious personal injuries, car crash victims and long-term disability claims. Kris also helps people who are facing impaired driving and over 80 related criminal charges.

Kris was born and raised in Trenton and has strong roots in the local community. Kris graduated from St. Paul’s Secondary School in Trenton. He attended Queen’s University where he obtained an Honours Commerce degree. He went to the big city to the University of Toronto for law school, graduating in 2000. Kris stayed in Toronto after graduation learning the ropes with the national law firm of Fasken Martineau DuMoulin before returning home.

Kris focuses on helping people who have suffered serious personal injuries, car crash victims and long-term disability claims. Kris also helps people who are facing impaired driving and over 80 related criminal charges. In 2005, Kris successfully obtained his designation as a qualified breath technician. Kris has successfully argued cases before juries, judges and the Court of Appeal in Toronto. He works with his clients to obtain the best possible results. If that means going to trial, he has the experience and know how to get the job done.

Kris is active in the community as a Director of the Ontario Trial Lawyers Association and the local Brain Injury Association Quinte District. He is a member of the Hastings County Law Association and the Advocates Society. He supports local charities, including the Trenton and Belleville Hospital Foundations.

Outside of the office he tries to make time in the early morning before work to run, bike and swim.